How to Scale a Business | #AskDavidMeltzer 17

The Playbook With David Meltzer

David Meltzer, Entrepreneur.com

Entrepreneurship, Business, Careers

4.6 • 1.9K Ratings

🗓️ 17 February 2021

⏱️ 3 minutes

🔗️ Recording | iTunes | RSS

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Summary

There are three phases to scaling a business: Phase 1: Learning Stage During the learning stage, introduce your values to new members of the team. It is vital that all employees are aligned with the values of your business. Help your team connect to what inspires them, and they are more likely to live by your business’s values. Phase 2: Execution In the execution stage, employees learn to maintain proper balance in achieving the company’s mission. Having a motto or mission to guide employees during this stage is important for success in a values-based business. Think about your overarching goals and what you want to accomplish. How can you make your mission into your story? Phase 3: Partnership (Equity) Once an employee shows commitment to these values, that opens up the door for the partnership/equity phase, where employees are rewarded for their dedication, success, and the revenues they have brought into your business.The partnership stage allows you to reinvest in your most successful (and aligned) employees and also helps to retain these individuals. If you want me to answer your question on the podcast, tweet me @davidmeltzer, or email me a video at [email protected] of you asking me a question and I will answer it for a future episode! Learn more about your ad choices. Visit podcastchoices.com/adchoices

Transcript

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0:00.0	What advice would you get to someone who's trying to scale their business?
0:04.0	So three stages of scaling a business and they're all quantitative to me.
0:07.2	One, you have to shift your perspective that the first stage of scaling a business and an investment phase.
0:13.0	Right, too many people try to scale a business and still make money.
0:16.0	You're either investing in your business or making money.
0:19.0	If you're scaling a business, you have to have quantified values on how much is it going to cost me to break even.
0:26.0	That's a phase.
0:27.0	So every employee that I have, I try to quantify how long is it going to take to that employee becomes profitable for me.
0:33.0	My office equipment, I literally put down in a quantitative fashion.
0:37.0	How can I get through this first phase, this investment phase to bring on bigger, better, etc.
0:43.0	You need to have what I call investment phase.
0:46.0	Then what you have to do is chart out an execution phase where you get to multiples of execution.
0:52.0	So for me, I like to get to a three time multiple for everything that I do.
0:56.0	So I get people to break even.
0:58.0	Then I try to have every asset, including the resources of employees, etc. to get to a three time multiple.
1:04.0	And then I give an equity phase, which could include bonuses, options, warrants, or even equity in my business.
1:10.0	So those three phases are truly the pragmatic way, not the value-based way of scaling a business.
1:16.0	Too many people, you have all these plans in a business.
1:22.0	I believe there should be one plan.
1:24.0	Guarantee you're going to be a business tomorrow.
1:26.0	Eventually you'll figure it out.
1:28.0	Keep on focusing, work hard, work smart, work long, ask for help.
	...

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